Ben Todd | Jun 2, 2017 | 1
SWIFT vs IBAN
A SWIFT code is used for identifying banks and accounts in other countries when the SWIFT international network is being used to transfer money. The IBAN code is also a code used to identify banks and bank accounts in other countries. It is not really a case of SWIFT vs IBAN; it is more a case of asking which code you will need when you send money abroad.
IF you are sending money to the US then note that presently the US does not use IBAN, but rather SWIFT. So IBAN, at present, means NON-US Banks
When you are dealing with accounts in some countries, you will need a SWIFT bank identifier code (such as wiring money to a bank in the USA) to help the senders and receivers recognize who’s who. The same is true with an IBAN code; you will have to use an IBAN code in some countries and not others.
SWIFT Vs IBAN – They Are Different
Both codes are made up in a very different way, and both codes do different jobs. A SWIFT code helps identify banks overseas, and an IBAN helps identify banks and accounts overseas.
The United States, in typical fashion, does not participate in the IBAN system. So you won’t need an IBAN code when sending money to the USA.
A SWIFT code is like a Bank Identified Code (BIC). The collective members and administrators of the SWIFT network are the also the ones who administer the BIC system.
The image below is of an IBAN code. The IBAN code has a country code, a check code, a bank code, and it has the sort code of the account holder and the account number of the account holder. The account number in the image is a UK bank account number.
An IBAN Isn’t A Replacement For Your Account Information
Your IBAN code may have your account information inside it, but that does not mean it is a suitable replacement for your account information. Other banks and institutions are going to ask for your name, your account information and your IBAN code (they may also ask other things too to confirm your identity).
Giving them your IBAN code alone is not enough. The same is true when people ask for your SWIFT code. Just giving them a SWIFT code is not enough to complete a transaction, you need to give you them bank information and details too.
SWIFT Vs IBAN – Why Are They Used?
People have to send money to other people in other countries, so the countries of the world got together and agreed to certain methods for sending money. Some use the SWIFT network, and others use networks that require an IBAN code.
IBAN codes and SWIFT codes make it easier to receive and to send payments abroad and function as a double security to ensure money transfers arrive at the RIGHT bank, even if you mess up some of the other info.
Using such networks may help people avoid fees and charges related to other types of money transfer, especially when receiving money from the EU. These codes have helped to simplify the movement of money from one country to another because you can make an international payment yourself right now by using your bank and somebody else’s bank information and their IBAN or SWIFT code.
The systems that are set in place are all automatic, which means there is no delay while you wait for humans to conduct the transactions, and there is far less chance of human error when money is being sent and received overseas and back again.